I believe there are two ways search will improve significantly in the future. First, since talking is easier than typing, speech recognition will allow longer and more accurate input strings. Second, search will be informed by much more persistent user information, with search companies having very detailed understanding of searchers. Based on that, I expect:

A small oligopoly dominating the conjoined businesses of mobile device software and search. The companies most obviously positioned for membership are Google and Apple.

The continued and growing combination of search, advertisement/recommendation, and alerting. The same user-specific data will be needed for all three.

Enterprise search is greatly disappointing.My main reason for saying that is anecdotal evidence — I don’t notice users being much happier with search than they were 15 years ago. But business results are suggestive too:

Web search, while superior to the enterprise kind, is disappointing people as well. Are Google’s results any better than they were 8 years ago? Google’s ongoing hardwork notwithstanding, are they even as good?

Consumer computer usage is swinging toward mobile devices. I hope I don’t have to convince you about that one. 🙂

In principle, there are two main ways to make search better:

Understand more about the documents being searched over. But Google’s travails, combined with the rather dismal history of enterprise search, suggest we’re well into the diminishing-returns part of that project.

Understand more about what the searcher wants.

The latter, I think, is where significant future improvement will be found.

So how will this all shake out? Well, let’s start with some basic points:

Google Chrome OS Release 1 is expected over a year from now, and then only on a limited subset of PCs, namely netbooks.

Google Chrome OS Release 1 is supposed to have great performance and be bullet-proof. Hmm …

Google is evidently assuming that the apps people want to run will either be browser-based, or else be new ones written for Chrome OS. Hmm …

Google is signaling that Chrome OS will be very limited in features. That makes sense for Release 1 — but what will be missing?

Consumers have proven their willingness to buy non-Microsoft computers, especially Apple ones, specifically in the Mac and iPhone/iTouch product lines.

A lot of people would have compatibility issues replacing Microsoft Excel or PowerPoint with partially-compatible alternatives. I’m not so sure about Microsoft Word, however. Other than those three, Outlook, and the Windows family itself, I’m not aware of any Microsoft client products that have much lock-in. (Well, maybe Xbox, but that’s not in the main stack.)

Open source software often gets most of its community support in a couple of areas, namely compatibilities and language translation. Google probably doesn’t need the help in languages, but letting other people fix Chrome OS compatibility issues whose importance it didn’t recognize is potentially valuable.

Google probably won’t make any direct revenue from Chrome OS. So how much will it invest in the project?

Notwithstanding Danny Sullivan’s concern, there isn’t much of an antitrust issue here. Google’s search can’t easily be used to favor Chrome, Chrome OS, or Google Apps. And the other way around — e.g., using Chrome OS to favor search — Google clearly isn’t a monopolist.

Loose Wire Blog offers a savage critique of Microsoft Encarta (whose discontinuation was recently announced). Although the blog seems in general to be a bit over-the-top curmudgeonly, that particular post seemed well-reasoned.

I’d like to make a more general comment about Microsoft: its online stuff is awful, and Encarta is no different. There are already plenty of people musing on why Encarta died, but I’d say one good reason is that it’s hard to access and get your mind around as pretty much every Microsoft online property.

Lynda Moulton, to put it mildly, disagrees with the Gartner Magic Quadrant analysis of enterprise search. Her preferred approach is captured in:

Coveo, Exalead, ISYS, Recommind, Vivisimo, and X1 are a few of a select group that are marking a mark in their respective niches, as products ready for action with a short implementation cycle (weeks or months not years).

By way of contrast, Lynda opines:

Autonomy and Endeca continue to bring value to very large projects in large companies but are not plug-and-play solutions, by any means. Oracle, IBM, and Microsoft offer search solutions of a very different type with a heavy vendor or third-party service requirement. Google Search Appliance has a much larger installed base than any of these but needs serious tuning and customization to make it suitable to enterprise needs.

Seth Grimes did a head-to-head comparison of Google and Microsoft Live Search results about the Microsoft/DATAllegro deal, 10 hours after it was announced. He found that Google had picked up a number of relevant results, while Live Search hadn’t. (And this was on the main search pages, not on News or Blogs.) He goes on to note that Yahoo’s “contextual” ads were badly irrelevant (Google didn’t have any at all).

What this boils down to, mainly, seems to be a major win in spidering speed for Google vs. Microsoft Live Search.

My lasttwo posts were based on the introductory slide to my talk The Text Analytics Marketplace: Competitive landscape and trends. I’ll now jump straight ahead to the talk’s conclusion.

Text analytics vendors participate in the same trends as other software and technology vendors. For example, relational business intelligence and data warehousing products are increasingly being sold to departmental buyers. Those buyers place particularly high value on ease of installation. And golly gee whiz, both parts of that are also true in text mining.

But beyond such general trends, I’ve identified six developments that I think could radically transform the text analytics market landscape. Indeed, they could invalidate the neat little eight-bucket categorization I laid out in the prior post. Each is highly likely to occur, although in some cases the timing remains greatly in doubt.

The Microsoft/Yahoo negotiation is in a very public phase right now. In its latest letter, the Yahoo board makes two references to “certainty,” in one case spelling out that this encompasses “certainty of value” and “certainty of closing.”

Yahoo CEO Jerry Yang has put out a shareholder letter in which he commits Yahoo to pursuing the strategies that have already devastated AOL. To wit:

Yahoo wants to be the internet “starting point” for ever more relatively naive users.

Yahoo wants to be an advertising “must buy.”

Yahoo doesn’t need to excel technologically in its user experience.

This is exactly what AOL tried in the late 1990s, except that they also had the best dial-up connectivity in the world. I know; Linda and I were strategic consultants to AOL then.* And we told them that while the rest of their strategy was excellent, it would be to no avail unless their tools matched the quality of what people could get in the office or elsewhere online. Because if AOL’s technology didn’t catch and keep up, people would just laugh and go elsewhere. (Even my parents, who still use AOL mail, go outside AOL for their web surfing. AOL is getting very little revenue from them, and they’re about as captive as AOL users get.)

*Please note — AOL was a great client, but the people we dealt with are (for the most part) long gone, and our NDAs ran out years ago.

That’s brain-dead. Just consider how far technology has taken Google, how fast gaming technology advances, or how fickle internet users are about switching to the latest and greatest online services. What’s worse, Yahoo seems to mean it, given how many serious technology leader types are out on the street in connection with the recent layoffs.

Pretty much the only remaining hope for the Yahoo brand(s) and services is for the Microsoft acquisition to go through, and for Microsoft/Yahoo to unlock the deal’s huge potential synergies — which, while far from being certain, is at least realistically possible.

The Microsoft/Yahoo negotiations are underway. Mike Arrington and Henry Blodget are fretting about Microsoft’s stock price decline in reaction to the deal.

It’s all nonsense. According to Microsoft’s 10-K statements, they have $27 billion in cash and equivalents and have $14-17+ billion/year in cash flow from operations. Assume they have to pay $40/share for Yahoo’s 1.4 billion shares in an all-cash deal (meaning they have to borrow around $30 billion). Assume that building out data centers adds a couple of billion of dollars a years in new capital costs. They can still pay all the debt back in three years. It’s all a non-issue, if they think the acquisition is worth it.

So is it? I see tons of synergies, but I’ll confess to not having quantified them. I’m also more optimistic about post-merger execution than many observers are. I do think Microsoft will have to pay up to complete the deal.

And I think Henry Blodget is proposing a false dichotomy when he suggests Microsoft is wrongly favoring ad-supported online software over subscription online software. Ad-supported personal use and subscription-supported enterprise use can co-exist.

EDIT: I forgot about the FAST deal when I wrote this, which will cost a few billion dollars more when it closes. But there was enough slack in the calculations to cover it. Microsoft could indeed pay the debt off over 3-4 years, although it would surely arrange a somewhat longer term for flexibility.